EDMONTON / Few words in the English language are more likely to cause fear and panic than the following: “Hello, this is the Canada Revenue Agency calling.”

Even for law-abiding, taxpaying wage slaves with zero to hide, the very thought of a surprise call or letter from the taxman is enough to induce sweaty palms. That’s because the CRA wields Enormous Power over our puny little lives. If you’ve ever been audited by the tax boys, you know what I’m talking about.

Suddenly, you’re scrambling for receipts, trying to recall how much mileage you racked up on business trips and who actually attended that lavish $1,600 dinner you hosted for clients last fall.

To calm your fears, and cut the odds of an unwelcome visit from the CRA, we offer the following advice, courtesy of Cleo Hamel, senior tax analyst at H&R Block in Calgary. She outlines the seven most common ways in which filers are most likely to attract the tax department’s

unwelcome scrutiny:

Forget a T-slip: This one is a no-brainer. Since the CRA receives copies of all the T-slips issued, they’ve already got your slips even before you file a return. Thus, if you forget, misplace or hide a T-slip, says Hamel, it will inevitably be uncovered, prompting a reassessment.

“Do this twice in a two-year period,” she warns, “and you will be looking at substantial penalties.” Hey, don’t say you weren’t forewarned.

Your new business looks like a hobby: No, the CRA doesn’t expect every startup to turn a fat profit in Year 1 or Year 2.

But you can’t create a business solely for the purpose of generating losses against which to shelter your income. That’s a no-no.

“There must be some reasonable expectation of profit in future years,” Hamel says. “If you claim year after year of losses, you may be answering questions about your business plan from a CRA auditor.”

Claiming credits incorrectly: Support payments are a particularly thorny issue, Hamel says.

“Support payments for children are deductible only if your agreement was dated before May 1, 1997,” she notes.

“Support payments for a spouse or common-law partner are only deductible if the court order or agreement is registered with the CRA,” she adds.

“So a claim for support payments on your 2010 return is pretty much going to guarantee a review if you do not have your court order or written agreement on file.”

Claiming regularly reviewed credits: Some types of credits — such as moving expenses — are more likely to spark a CRA review than others. (I can attest to this personally; my own moving costs were audited by the CRA after I moved to Edmonton in 2003.)

“If you are asked to supply your receipts, you should not be concerned as long as you claimed everything correctly,” Hamel says.

“Same with the tuition transfer. As long as you have the signed T2202A form from the student doing the transferring, you have nothing to worry about.”

Without that student’s signature, however, you could be called on the carpet to explain.

Out-of-the-ordinary expenses: Claiming higher-than-usual expenses is asking for trouble, Hamel warns, whether it involves dental fees or business entertainment expenses.

“For obvious reasons, the CRA does not publicize what the amounts are that will automatically trigger a review,” she adds.

“However, if you are claiming to use your vehicle 95 per cent for business, we would expect that they will want to see your log book.”

One of her clients — a lawyer who bought a big-screen TV and VHS player to review videotaped depositions — had the expenses denied when the CRA found kids’ movies mixed in with the court tapes.

Living large on a tiny income: If you’re living in a $750,000 pad, driving a new Hummer but working as a clerk at Blockbuster, your nosy neighbours might decide to call the CRA’s snitch line.

If they do, don’t be surprised if the CRA shows up and demands to conduct a net-worth assessment on you. If the numbers don’t add up, you’ll have to explain why.

“You may have won the lottery or come into an inheritance,” Hamel says. “On the other hand, you may be doing work under the table. If so, you may want to come clean under the CRA’s voluntary disclosure program.” It just might save you a trip to the crowbar hotel, she adds.

Compliance history: It’s not surprising that the CRA pays particular attention to known tax cheats. Get caught once, and you’ll be on the agency’s radar for life.

“If the CRA finds that you have cheated once, you can rest assured that this is not the last you will hear from them,” Hamel says.

“If, on the other hand, they conduct a random review and you pass with flying colours, they will be more likely in the future to commit their resources elsewhere.”

There now. Feeling better? Hope so.

And don’t forget to file your tax return by April 30.